Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

A level Business aqa > Unit 8 > Flashcards

Unit 8 Flashcards

1
Q

Ansoff Matrix

A
  • strategic planning tool used to plan future growth strategies.
    1. market penetration - least riskiest (same market + product)
    2. product development - (new product, same market)
    3. market development - (new market, same product)
    4. diversification - most riskiest - (new product + market)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

market penetration

A
  • existing market + product = least riskiest
  • may be achieved via marketing - increasing advertising

Mcdonalds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

product development

A
  • developing a new product in the same market

example: organic Coca Cola

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

market development

A
  • growth via expansion ~ selling existing product to new market
    this may be via new distribution channels e.g. e-commerce, stores etc
    or selling to international markets

Examples: Mcdonalds , starbucks in china

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

diversification

A
  • producing a new product in a new market - most riskiest & most expensive.
  • requires R&D and market research

Examples: Mcdonalds hotel,

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Porters 5 forces

A
  1. threat of new entrants
  2. bargaining power of suppliers
  3. bargaining power of consumers
  4. degree of rivalry
  5. threat of substitute products
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Threat of new entrants

A
  • how difficult it is to enter a market
    Barriers to entry:
  • Economies of scale - low unit costs
  • cost of entry
  • product differentiation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

bargaining power of suppliers

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

bargaining power of consumers

A
  • price/ income elasticity of demand gives consumers more power
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

degree of rivalry

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

threat of substitutes

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

porters generic strategies

A
  • used to find a way to achieve sustainable competitive advantage over other competing products & firms in a market.
  1. cost leadership - lowest cost in a mass market
  2. differentiation - unique brand/product etc in a mass market

Stuck in the middle - multiple strategies but not achieving any of them

  1. cost focus - being the cheapest provider in a niche market
  2. differentiation focus - most unique in a niche market
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Cost leadership - competitive advantage

A
  • MASS MARKET

Achieved thru:
- economies of scale
- low cost production facilities
- employing tight cost control methods
- selling basic products that solves the problem

Examples: Walmart, Southwest, Amazon, Ryanair
- all businesses that are very profitable and operate at the lowest cost in their market.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Differentiation - competitive advantage

A

MASS MARKET
- achieved thru:
-unique product features/ branding/ designs
- higher quality
- higher customer service levels
~ these are usually priced higher than their competitors.

Examples: Louis Vuitton, Apple, Lego, Harley - Davidson.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Stuck in the middle

A
  • pursuing multiple strategies but failing to achieve any of them.

Examples: Sony - Tv’s are not cheaper nor any uniquer in comparison to other brands.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

cost focus

A
  • niche market
  • set out to become the lowest cost producer for a specific niche within an industry
  • only difference btwn this and leadership is that this focuses on niche markets within an industry excluding the other segments.

Example: Monster Energy drinks, SanDisk, NetJets

17
Q

differentiation focus

A
  • niche market
  • most unique and desirable provider for a specific niche within an industry
  • the only difference btwn this and differentiation is that this focuses on narrower slice of industry excluding other segments

Examples: the whole foods market - niche market that focuses on selling organic and natural produce at higher prices which customers are willing to pay for.

18
Q

organic growth

A

internal growth (growth within the business)
- e.g. increasing product range, opening new stores, new locations - franchising
- ansoff’s matrix
- slower growth

19
Q

inorganic growth

A

external growth - outside of the business but within the industry.
e.g. mergers x takeovers (acquisitions)
- faster growth

20
Q

reasons for taking over a business

A
  • larger customer base = grow quicker
  • combined expertise + new skills
  • growing brand image w out having to establish it yourself
  • increase market share, revenue global + domestic expansion
  • eliminate competition + secure better distribution
21
Q

reasons for takeovers failing

A
  • lack of research + knowledge of new market = taking over a business in a market that they’re not familiar with
  • higher costs + poor communication
  • lack of decisive management + loss of key personnel
  • incompatibility of management styles, structure + culture
  • upset customers + suppliers
  • resistance of employees to the change, change of management etc
22
Q

horizontal integration

A
  • the coming together of two firms in the same industry and the same market
    examples: EE & Three, Volkswagen x Skoda
23
Q

pros and cons of horizontal integration

A

pros:
- reduces the amount of competition in the market
- increases businesses market share + customer base
- take advantage of internal economies of scale
- buying existing brand is cheaper than developing own brand = can make entry barriers higher for rivals

24
Q

forward x backward vertical integration

A

forward - taking over distribution channels e.g. buying out manufactures or stores that sell your product
examples: brewery’s buy out pubs to sell their drinks in

backwards - taking over suppliers in supply chain e.g. Birdseye have bought farms that produce their ingredients - farmers pay them rent

examples of businesses that own their supply chain = Shell, BP

25
Q

pros x cons of vertical integration

A

+ creates barriers to entry = easier access to raw materials compared to rivals who may have to pay more
+ control of supply chain = reduces unit cost & improves quality of products
+ better control of distribution = can add channels to improve revenue

26
Q

conglomerates

A

when a business takes over a business that does not operate in the same market/ product area e.g. Unilever owns Ben & Jerry’s ice cream, Lipton tea and offers household items

27
Q

oligopoly

A
  • a market where there are a few dominant firms
    e.g. the car market, tech/ phone market
28
Q

economies of scale - internal

A

internal:
- purchasing = bulk buying which leads to discounted products = cheaper
- technical = purchasing latest technology to improve productivity and efficiency
- managerial = hiring managers that prioritise cost cutting and boosting efficiency
- marketing = spreading marketing spend over larger range of products
- network = adding customers + users to already established networks e.g. phones
- financial = larger firms benefit from access to more + cheaper finance

29
Q

economies of scale - external

A

external (all competitors benefit)
- infrastructure/ geographic areas :
e.g. creative media in London
examples:
- having specialist supplies close by
- access to research + dev facilities
- pool of skilled labour to choose from

30
Q

diseconomies of scale

A

(rising unit costs)
-issues w communication + lack of synergy = reduces productivity leading to higher costs ~ often linked to managerial diseconomies of scale

  • control - problems w monitoring quality + productivity, increasing wastage of resources
  • co operation - workers in larger firms may develop sense of alienation + loss of morale
31
Q

joint ventures

A
  • 2 businesses joining together in certain areas as a separate business entity
    example: L’Oreal, Hotel Shilla + Anchor equity partners came together to launch new luxury cosmetic brand “shihyo” - Korean cosmetic brand

A level Business aqa (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions